Emergent Research

EMERGENT RESEARCH is focused on better understanding the small business sector of the US and global economy.

Authors

The authors are Steve King and Carolyn Ockels. Steve and Carolyn are partners at Emergent Research and Senior Fellows at the Society for New Communications Research. Carolyn is leading the coworking study and Steve is a member of the project team.

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Disclosure Policy

Emergent Research works with corporate, government and non-profit clients. When we reference organizations that have provided us funding in the last year we will note it.
If we mention a product or service that we received for free or other considerations, we will note it.

September 2015

September 29, 2015

The number of independent workers aged 21 and up stands at 30.2 million in 2015, divided between 17.8 million Full-Time Independents and 12.4 million Part-Time Independents. These are people who regularly work as independent workers (self-employed, freelancers, temps, etc.) in an average work week.

2.9 million (or 16%) of the 17.8 million Full-Time Independents reported that they earned more than $100,000, up 45% from 2 million in 2011.

The single most-often cited factor for working independently was “the ability to control my own schedule.” (61%)

In 2015, 43% of those currently working full-time as Independents report that they feel more secure working independently, up from 33% in 2011.

79% of independent workers reported they are happier due to being independent.

By 2020, the number of independent workers in America is expected to grow to 37.9 million.

This is the 5th year this longitudinal study of independent workers has been conducted.

The short video below contains more data and information. Go to the study's website for additional resources and information.

Emergent Research (that's us) partnered with MBO Partners on this study.

September 28, 2015

Industrious is a fast growing coworking chain that started in Chicago and now has spaces in a dozen or cities. Like the better known WeWork, Industrious spaces tend to be quite large by traditional coworking space standards.

What I really like about Industrious is how they've branded themselves. The call themselves "social offices". Key quote from their website:

We've created the social office—communities of 1 to 10 person private offices with plenty of common space and coworking for companies to share, socialize, and collaborate.

Our goal? To offer you the privacy you need to be productive, as well as the community you need to stay invigorated.

This theme is echoed by work being done by European coworking expert Jean-Yves Huwart. He's holding the Social Workplace Conference in October in London to explore the role of social interactions in work.

Key quote from the conference website on the question they hope to answer at this event:

Organizations are moving forward along an evolutionary spectrum, toward self-management, wholeness, and a deeper sense of purpose.

The key quote, at least in my opinion, is around the very squishy topic of wholeness:

Teal organizations invite people to reclaim their inner wholeness. They create an environment wherein people feel free to fully express themselves, bringing unprecedented levels of energy, passion, and creativity to work.

We too have been exploring this topic. Our recent work clearly shows the importance of social interactions in coworking spaces and the role this plays in improving both productivity and member wellbeing.

We've been following coworking since 2007 and one of the most interesting aspects of this industry is how consistently people all over the world describe coworking and its benefits. It's no wonder coworking is booming around the world.

September 22, 2015

The New York Time's article A Toxic Work World nicely summarizes the growing Darwinian nature of traditional jobs. Key quote:

FOR many Americans, life has become all competition all the time. Workers across the socioeconomic spectrum, from hotel housekeepers to surgeons, have stories about toiling 12- to 16-hour days (often without overtime pay) and experiencing anxiety attacks and exhaustion. Public health experts have begun talking about stress as an epidemic.

The people who can compete and succeed in this culture are an ever-narrower slice of American society: largely young people who are healthy, and wealthy enough not to have to care for family members.

The article's author suggest a number of policy and legal changes to make it work easier and more flexible. But the article points out getting new laws and policies passed and implemented will not happen quickly or easily.

Interestingly enough, the article did not mention the millions of people who are choosing to become independent workers because so many traditional jobs have become toxic.

Being "rich" is no longer solely defined by how much money you make. Today, freedom is valued nearly as much as income. For a growing part of the workforce, making hundreds of thousands of dollars a year while working 60-80 hours a week isn't a worthy trade-off. In fact, many people turn to entrepreneurship for exactly this reason: they want the opportunity to make big bucks while maintaining control over their own schedules.

The article points out going independent is not easy. But compared with toxic work environments, it's often well worth it.

Key quote from the article, which is written by a MIT engineering professor:

I nonetheless believe that the slowdown is due, in part, to an acceleration of “near-shoring,” the practice of producing closer to the customer.

The article goes on to describe several surveys and studies that:

... may suggest that the world is in the middle of a transformation, with companies moving from a global manufacturing strategy, whose focus is on low-cost countries, to a more regional strategy, where China is for China, the United States (or Mexico and Latin America) is for the Americas, and Eastern Europe is for European markets.

The article lists 4 main drivers of the shift to near-shoring:

Lower US energy prices

Higher Chinese labor costs

Automation, which favors highly skilled labor

Supply chain risk is greater the longer the supply chain

We first noticed the shift to bringing some manufacturing back to the US in 2007. Since then we written extensively about this trend in our small manufacturing section (and yes, I'm definitely patting us on the back for this piece of trend spotting).

We continue to see more manufacturing moving back to the US. We also think a number of trends and shifts will drive the continued growth of small manufacturing, with a big one being the growing support infrastructure for small makers and manufacturers.

September 15, 2015

The choice between self-employment or having a traditional job is a competition.

People tend to go through a mental math process of weighing the options against each other. After weighing the options, a winner is picked.

Up until about a decade or so ago the math heavily favored traditional employment, except for those that highly valued being their own boss.

But benefit cuts, increased workloads, declining job security and a growing desire for more work autonomy, control and flexibility has made traditional employment less attractive and independent work more attractive.

This has evened out the math, leading more people to choose independent work.

The trends driving this "math shift" away from traditional employment started well before the Great Recession and the economic downturn accelerated these shifts.

The Great Recession also resulted in more people working independently not by choice, but by necessity. Many of these necessity-preneurs prefer traditional employment.

The cyclical recovery and recent strong job market is making traditional employment both more available and attractive. This is allowing the folks who would prefer traditional employment to return to traditional jobs.

Bloomberg View's Free Agent Nation is Shrinking covers the impact of the strong labor market on freelancing. The key quote is on cyclical versus secular forces:

while there may well be a secular shift going on toward independent or contingent work, cyclical economic forces are stronger.

As the article points out, the results from the 2015 MBO Partners State of Independence study show the number of full-time independent workers has been somewhat flat over the past 2 years (despite the article's title, it has not declined).

I'm quoted in the article on the reason it's been relatively flat:

The strong economy is pulling people back into traditional employment, especially those who don't want to be independent and prefer traditional jobs. This group makes up about 30 percent of all independents ...

Despite this short term cyclical blip, the long term trends driving the structural shift towards a larger independent workforce are still in place and strong:

Robotic process automation (RPA) is the application of technology that allows employees in a company to configure computer software or a “robot” to capture and interpret existing applications for processing a transaction, manipulating data, triggering responses and communicating with other digital systems.

In other words, RPA is using computers, algorithms and robots to do work instead of humans.

More from the Institute:

Just as industrial robots are remaking the manufacturing industry by creating higher production rates and improved quality, RPA “robots” are revolutionizing the way we think about and administer business processes, IT support processes, workflow processes, remote infrastructure and back-office work. RPA provides dramatic improvements in accuracy and cycle time and increased productivity in transaction processing while it elevates the nature of work by removing people from dull, repetitive tasks.

So if we can just rid of those pesky, inefficient humans things will be much better for everyone.

Regular reader know we refer to this as pet humanization and that it's one of our favorite trends. It's even tangentially linked to the topic of this blog because pet humanization is leading to a lot of small business opportunities.

The key article quote is:

Just how deep are our ties with our pets? According to a recent Nielsen survey conducted by Harris Poll, 95% of U.S. pet owners consider their pets to be part of the family. And in looking at how much we spend on our pets, it’s clear that U.S. consumers are sparing no expense when it comes to their “families.”

The article reports that 62% of Americans have a pet in their household, with Gen Xers (71%) and Millennials (65%) the two largest pet owning generations.

Dogs are by far the most popular - and rightly so in my opinion - with 71% of pet owners saying they have at least one dog. Cats come in second with 49% having at least one cat. Fish are 3rd (11%), other comes in 4th (9%) and birds 5th (8%)

The article has a great quote on pet humanization:

Forty-five percent of owners buy birthday presents for their pets, and 64% buy them gifts on holidays. While Gen Xers own the most pets, Millennials are the most likely to buy birthday presents for their pets: 54% of Millennials give birthday gifts, compared with 40% Gen X, 42% Baby Boomers and 27% Matures (69+). Millennials are also most likely to dress their pets in clothing.

September 08, 2015

It seems like every time I turn on my computer I see another story about how bad on-demand economy jobs are.

But I think critics are missing two very important points:

1. Research on this sector - ours and the research of others - consistently finds the majority of on-demand workers are satisfied and prefer their on-demand work over a traditional full or part-time job.

Regardless of the concerns of policy-makers, litigators, and lobbyists around worker classification, the On-Demand Economy is here to stay because of its core benefit – people feel empowered and liberated knowing that they can work when they want to.

The other UberX and Lyft drivers had a variety of backgrounds from students, insurance agents and startup employees to former restaurant and retail employees. Their reasons for choosing this on demand career option were similar— the ability to work when and how much they wanted, to not have a boss.

They feared being “Instacarted,” if switched to W-2 employees— referring to Instacart’s recent worker reclassification that resulted in restricted and scheduled hours for a low hourly W-2 wage. If this happened, they would stop driving.

Alert readers probably noticed these articles are written by people with stake in this game.

This is because most reporters don't like the on-demand economy and especially Uber. So it's hard to find articles that aren't negatively biased against on-demand economy jobs, even when the reporter acknowledges the positives.

For example, the BBC's Will Uber Drivers Turn on Uber makes it clear that majority of drivers the reporter talked to like being independent workers, mostly because of the flexibility. Key quote:

Uber's defence in the employee/contractor debate is that its workforce is pretty diverse. Some want to work part-time, others full-time. Some want to work intensely for a few weeks, then take a few weeks off.

It's on their own terms, and Uber says only a contractor set-up makes this possible.

And the vast majority of drivers I spoke to agreed. Passionately.

But, of course, the article focuses on what the reporter calls the exceptions - the folks who are "keen to be employees" - and their problems, instead of the "vast majority" that prefer being independent.

To be fair, not all on-demand economy workers are positive about their work.

Our work shows a sizable share - about 30% - aren't satisfied and would prefer a traditional job. This group is larger - around 55% - among those working full-time in the on-demand economy.

There's also clearly a dark side of independent work and we need better laws and protections to improve the working conditions of those being exploited or treated unfairly.

So I understand why there is so much negative reporting on this topic. There are problems that need to be fixed.

But we also need to make sure that the majority of on-demand workers who like and find success working in the on-demand economy have the continued ability to choose this path.